Regional Management Corp.: Form 10-Q for the period ended Jun 30, 2026

An index to our management’s discussion and analysis follows:

Forward-Looking Statements

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements that reflect our current expectations and that include, but are not limited to, statements concerning our strategies, future operations, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our financial products, growth opportunities and trends in the market in which we operate, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “predicts,” “will,” “would,” “should,” “could,” “potential,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements involve risks and uncertainties that could cause actual results, events, and/or performance to differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements. Such risks and uncertainties include, without limitation, the risks set forth in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (which was filed with the SEC on February 20, 2026), our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026 (which was filed with the SEC on May 1, 2026), and this Quarterly Report on Form 10-Q. The forward-looking information we have provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or revise such statements, except as required by the federal securities laws.

Overview

We are a diversified consumer finance company that provides installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders. As of June 30, 2026, we operate under the name “Regional Finance” online and in 357 branch locations in 20 states across the United States, serving 563,600 active accounts. Most of our loan products are secured, and each is structured on a fixed-rate, fixed-term basis with fully amortizing equal monthly installment payments, repayable at any time without penalty. We source our loans through our omni-channel platform, which includes our branches, centrally-managed direct mail campaigns, digital partners, and our consumer website. We operate an integrated branch model in which nearly all loans, regardless of origination channel, are serviced through our branch network with the support of centralized sales, underwriting, service, collections, and administrative teams. This model provides us with frequent contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently grow our finance receivables and to soundly manage our portfolio risk, while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.

Our products include:

• Large Loans (>$2,500) – As of June 30, 2026, we had 293.1 thousand large installment loans outstanding, representing $1.7 billion in net finance receivables. This included 85.4 thousand large loan convenience checks, representing $286.5 million in net finance receivables.
• Small Loans (≤$2,500) – As of June 30, 2026, we had 270.5 thousand small installment loans outstanding, representing $488.6 million in net finance receivables. This included 138.1 thousand small loan convenience checks, representing $211.9 million in net finance receivables.
• Optional Insurance Products – We offer optional payment and collateral protection insurance to our direct loan customers.

Our core products are large and small installment loans. Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to large and small installment loans are the largest component. In addition to interest and fee income from loans, we earn revenue from optional insurance products purchased by customers of our loan products.

Factors Affecting Our Results of Operations

Our business is impacted by several factors affecting our revenues, costs, and results of operations, including the following:

Quarterly Information and Seasonality. Our loan volume and contractual delinquency follow seasonal trends. Demand for our loans is typically highest during the second, third, and fourth quarters, which we believe is largely due to customers borrowing money for vacation, back-to-school, and holiday spending. Loan demand has generally been the lowest during the first quarter, which we believe is largely due to the timing of income tax refunds. Delinquencies generally reach their lowest point in the first half of the year and rise in the second half of the year. Changes in the portfolio could result in releases of the allowance for credit losses in periods of portfolio liquidation and increases to the allowance for credit losses in periods of portfolio growth. Consequently, we experience seasonal fluctuations in our operating results. However, changes in macroeconomic factors, including inflation, higher interest rates, and geopolitical conflict, have impacted our typical seasonal trends for loan volume and delinquency.

Growth in Loan Portfolio. The revenue that we generate from interest and fees is largely driven by the balance of loans that we originate. We source our loans through our branches, centrally-managed direct mail program, digital partners, and consumer website. The majority of our loans, regardless of origination channel, are serviced through our branches. Increasing the number of loans per branch and growing our state footprint allows us to increase the number of customers we are able to serve. We grew our state footprint from 19 to 20 states in May 2026, expanding our operations to Florida. We continue to assess our branch network for clear opportunities to add branches in new and existing states where it is favorable for us to conduct business or consolidate operations into larger branches within close geographic proximity. This branch optimization is consistent with our omni-channel strategy and builds upon our recent successes in entering new states with a lighter branch footprint, while still providing customers with best-in-class service.

Product Mix. We are exposed to different credit risks and charge different interest rates and fees with respect to the various types of loans we offer. Our product mix also varies to some extent by state, and we may further diversify our product mix in the future. The interest rates and fees vary from state to state, depending on the competitive environment and relevant laws and regulations.

Asset Quality and Allowance for Credit Losses. Our results of operations are highly dependent upon the credit quality of our loan portfolio. The credit quality of our loan portfolio is the result of our ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as we grow our loan portfolio.

The primary underlying factors driving the provision for credit losses for each loan type are our underwriting standards, delinquency trends, the general economic conditions in the areas in which we conduct business, loan portfolio growth, and the effectiveness of our servicing and collection efforts. We monitor these factors, and the amount and past due status of all loans, to identify trends that might require us to modify the allowance for credit losses.

Interest Rates. Our costs of funds are affected by changes in interest rates, as the interest rates that we pay on certain of our credit facilities are variable. As a component of our strategy to manage the interest rate risk associated with future interest payments on our variable-rate debt, a majority of our funding was held at a fixed rate as of June 30, 2026, representing 80% of our total debt balance.

Operating Costs. Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income.

Bank Partnership Program. On March 2, 2026, we entered an agreement with Column, under which Column originates certain unsecured and auto-secured installment loan products offered through our platform and other approved channels. This program is an important enabler of our long-term strategy, providing greater product and operational uniformity across states, faster entry into new markets, expanded relationships with our customers, and attractive unit economics as it scales. We act as Column's service provider and program manager by performing marketing, processing, and servicing activities. We will purchase any such loans offered by Column, except in limited circumstances.

The bank partnership program impacts the timing and classification of certain revenues and expenses as compared to loans originated under our state-licensed operations. For loans originated under the program, we earn marketing and processing fees from Column that are recognized in other income at the time of origination. In contrast, origination fees associated with loans originated directly by us are generally deferred and recognized in interest and fee income over the life of the loan using the constant yield method. We also receive servicing fee income related to loans retained by Column that are recognized in other income.

In addition, certain personnel and digital affiliate marketing costs that would otherwise be deferred and recognized over the life of a state-licensed originated loan are generally expensed as incurred for loans originated under the bank partnership program within personnel expense and marketing expense, respectively. Other program costs include monthly platform fees and certain ongoing program monitoring expenses that are recorded to other expenses.

As bank partnership loan volumes increase, the program may result in differences in the timing and classification of certain revenues and expenses and changes the classification of those amounts within the statement of comprehensive income. Accordingly, growth in bank partnership loan volume may affect the comparability of period-to-period trends in interest and fee income, other income, and general and administrative expenses, as compared to periods prior to the implementation of the program.

Components of Results of Operations

Interest and Fee Income. Our interest and fee income consists primarily of interest earned on outstanding loans. Accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If the account is charged off, the accrued interest income is reversed as a reduction of interest and fee income.

Most states allow certain fees in connection with lending activities, such as loan origination fees, acquisition fees, and maintenance fees. Some states allow for higher fees while keeping interest rates lower. Loan fees are additional charges to the customer and generally are included in the APR shown in the Truth in Lending disclosure that we make to our customers. The fees may or may not be refundable to the customer in the event of an early payoff, depending on state law. Fees are recognized as income over the life of the loan on the constant yield method.

Insurance Income, Net. Our insurance operations are a material part of our overall business and are integral to our lending activities. Insurance income, net consists primarily of earned premiums, net of certain direct costs, from the sale of various optional payment and collateral protection insurance products offered to customers who obtain loans directly from us. Insurance income, net also includes the earned premiums and direct costs associated with the non-file insurance that we purchase to protect us from credit losses where, following an event of default, we are unable to take possession of personal property collateral because our security interest is not perfected. We do not sell insurance to non-borrowers. Direct costs included in insurance income, net are claims paid, claims reserves, ceding fees, and premium taxes paid. We do not allocate to insurance income, net, any other head office or branch administrative costs associated with management of insurance operations, management of our captive insurance company, marketing and selling insurance products, legal and compliance review, or internal audits.

Other Income. Our other income consists of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment, interest income from restricted cash, commissions earned from the sale of club membership products, investment income from restricted AFS securities, and marketing and processing fee income earned through our bank partnership program.

Provision for Credit Losses. Provisions for credit losses are recorded in amounts that we estimate as sufficient to maintain an allowance for credit losses at an adequate level to provide for lifetime expected credit losses on the related finance receivable portfolio. Credit loss experience, current conditions, reasonable and supportable economic forecasts, delinquency of finance receivables, loan portfolio growth, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for credit losses. Substantial adjustments to the allowance may be necessary if there are significant changes in forecasted economic conditions or loan portfolio performance.

General and Administrative Expenses. Our financial results are impacted by the costs of operations and head office functions. Those costs are included in general and administrative expenses within our consolidated statements of comprehensive income. Our general and administrative expenses are comprised of four categories: personnel, occupancy, marketing, and other.

Our personnel expenses are the largest component of our general and administrative expenses and consist primarily of the salaries and wages, overtime, contract labor, relocation costs, incentives, benefits, and related payroll taxes associated with all of our operations and head office employees.

Our occupancy expenses consist primarily of the cost of renting our facilities, all of which are leased, and the utility, depreciation of leasehold improvements and furniture and fixtures, communication and connectivity services, and other non-personnel costs associated with operating our business.

Our marketing expenses consist primarily of costs associated with our direct mail campaigns (including postage and costs associated with selecting recipients), digital marketing, maintaining our consumer website, and local marketing by branches. These costs are expensed as incurred.

Other expenses consist primarily of legal, compliance, audit, and consulting costs, as well as software maintenance and support, non-employee director compensation, electronic payment processing costs, bank service charges, office supplies, credit bureau charges, and the amortization of software, software licenses, and implementation costs. We frequently experience fluctuations in other expenses as we grow our loan portfolio and expand our market footprint.

For a discussion regarding how risks and uncertainties associated with the current regulatory environment may impact our future expenses, net income, and overall financial condition, see Part II, Item 1A, “Risk Factors.”

Interest Expense. Our interest expense consists primarily of paid and accrued interest for debt, unused line fees, and amortization of debt issuance costs.

Income Taxes. Income taxes consist of state and federal income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The change in deferred tax assets and liabilities is recognized in the period in which the change occurs, and the effects of future tax rate changes are recognized in the period in which the enactment of new rates occurs.

Results of Operations

The following table summarizes our results of operations, both in dollars and as a percentage of average net finance receivables (annualized) for the periods indicated:

Dollars in thousands

Information explaining the changes in our results of operations from year-to-year is provided in the following pages.

The following tables summarize the quarterly trends of our financial results for the periods indicated:

In thousands, except per share amounts

36

Comparison of June 30, 2026, versus June 30, 2025

The following discussion and table describe the changes in finance receivables by product type for the periods indicated:

• Large Loans (>$2,500) – Large loans outstanding increased by $246.3 million, or 17.4%, to $1.7 billion at June 30, 2026, from $1.4 billion at June 30, 2025. The increase was due to growth in our auto-secured loan portfolio, the growth of receivables in branches opened during 2025 and 2026, and the transition of small loan customers to large loans.
• Small Loans (≤$2,500) – Small loans outstanding decreased by $58.4 million, or 10.7%, to $488.6 million at June 30, 2026, from $547.0 million at June 30, 2025. The decrease was driven by tightened underwriting in higher-risk business amid a more competitive environment for new customer acquisition, and the transition of small loan customers to large loans, partially offset by growth of receivables in branches opened during 2025 and 2026.

Dollars in thousands

Comparison of the Three Months Ended June 30, 2026, versus the Three Months Ended June 30, 2025

Net Income. Net income decreased $2.0 million, or 19.6%, to $8.2 million during the three months ended June 30, 2026, from $10.1 million during the prior-year period. The change in net income is explained in greater detail below.

Revenue. Total revenue increased $10.6 million, or 6.7%, to $168.0 million during the three months ended June 30, 2026, from $157.4 million during the prior-year period. The components of revenue are explained in greater detail below.

Interest and Fee Income. Interest and fee income increased $9.6 million, or 6.8%, to $150.3 million during the three months ended June 30, 2026, from $140.7 million during the prior-year period. The increase was primarily due to a 10.6% increase in average net finance receivables, partially offset by a 1.0% decrease in interest and fee yield. The decrease in yield was primarily due to changes in portfolio mix, including a higher percentage of large and auto-secured loans and a shift toward larger balance small loans with longer maturities, which generally carry lower interest rates.

The following table sets forth the average net finance receivables balance and interest and fee yield for our loan products for the periods indicated:

Dollars in thousands

Total originations decreased to $503.6 million during the three months ended June 30, 2026, from $510.3 million during the prior-year period. Small loan originations decreased $41.5 million, or 23.9%, driven by tightened underwriting in higher-risk business amid a more competitive environment for new customer acquisition. This decrease was partially offset by a $34.8 million, or 10.4%, increase in large loan originations, driven by growth in our auto-secured loan portfolio, new branches opened during 2025 and 2026, and the transition of small loan customers to large loans. The following table represents the principal balance of loans originated, refinanced, and purchased for the periods indicated:

Dollars in thousands

37

The following table summarizes the components of the increase in interest and fee income when comparing the three months ended June 30, 2026 and 2025:

Dollars in thousands

Insurance Income, Net. Insurance income, net decreased $0.5 million, or 4.5% to $11.0 million during the three months ended June 30, 2026, from $11.5 million during the prior-year period. During both the three months ended June 30, 2026 and 2025, personal property insurance premiums represented the largest component of aggregate earned insurance premiums, and life insurance claims expense represented the largest component of direct insurance expenses.

The following table summarizes the components of insurance income, net for the periods indicated:

Dollars in thousands

Earned premiums increased by $0.2 million, and claims, reserves, and certain direct expenses increased by $0.7 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to increases in personal property insurance premiums and life insurance premiums. Claims, reserves, and direct expenses increased primarily due to a prior-year release in personal property insurance reserves related to previous hurricane activity.

Other Income. Other income increased $1.5 million, or 28.7%, to $6.8 million during the three months ended June 30, 2026, from $5.2 million during the prior-year period, primarily due to marketing and processing fee income earned through our bank partnership program of $1.7 million, partially offset by a decrease in interest income of $0.2 million from decreases in our restricted cash balances year-over-year.

Provision for Credit Losses. Our provision for credit losses increased $8.4 million, or 13.9%, to $69.0 million during the three months ended June 30, 2026, from $60.6 million during the prior-year period. The increase was due to an increase in net credit losses of $7.6 million and the sequential change in the allowance for credit losses of $0.8 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.

Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the three months ended June 30, 2026 and 2025, the allowance for credit losses included builds of $4.5 million and $3.7 million, respectively. The allowance for credit losses as a percentage of net finance receivables increased to 10.4% as of June 30, 2026, from 10.3% as of June 30, 2025. The higher build in the allowance year-over-year was primarily driven by portfolio growth and changes in estimated future macroeconomic impacts on credit losses.

Net Credit Losses. Net credit losses increased $7.6 million, or 13.4%, to $64.5 million during the three months ended June 30, 2026, from $56.9 million during the prior-year period. The net credit loss rate was 12.2% during the three months ended June 30, 2026, compared to 11.9% during the prior-year period. The increase in the net credit loss rate included a 20 basis point impact from slower portfolio growth over the first six months of 2026 compared to the same period in 2025.

Delinquency Performance. Our delinquency rate increased to 7.0% as of June 30, 2026 from 6.6% as of the prior-year period, primarily driven by slower portfolio growth during the first six months of 2026 compared to the same period in 2025, which contributed approximately 20 basis points to the increase, and the continued impact of legacy balances from higher-risk segments that we have since tightened.

The following tables include delinquency balances by aging category and by product for the periods indicated:

Dollars in thousands

Dollars in thousands

General and Administrative Expenses. Our general and administrative expenses increased $2.5 million, or 4.0%, to $65.4 million during the three months ended June 30, 2026, from $62.9 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.

Personnel. The largest component of general and administrative expenses was personnel expense, which increased $0.8 million, or 2.2%, to $39.4 million during the three months ended June 30, 2026, from $38.6 million during the prior-year period. The increase was primarily driven by increased labor costs of $1.0 million to support growth (including labor costs associated with the bank partnership program of $0.5 million that are expensed as incurred rather than deferred, as described above in “Factors Affecting Our Results of Operations”), incremental executive transition costs of $0.4 million, and a reduction in capitalized loan origination costs of $0.2 million (which increased personnel expenses). The increase was partially offset by lower incentive compensation of $0.9 million.

Occupancy. Occupancy expenses increased $0.3 million, or 4.9%, to $7.3 million during the three months ended June 30, 2026, from $6.9 million during the prior-year period, primarily due to expenses associated with opening 12 new branches since the prior-year period.

Marketing. Marketing expenses decreased $0.2 million, or 3.4%, to $4.9 million during the three months ended June 30, 2026, from $5.1 million during the prior-year period, primarily due to optimization of our framework for direct mail marketing of $0.4 million, partially offset by digital marketing costs associated with the bank partnership program of $0.2 million that are expensed as incurred rather than deferred, as described above in “Factors Affecting Our Results of Operations.”

Other Expenses. Other expenses increased $1.5 million, or 11.9%, to $13.9 million during the three months ended June 30, 2026, from $12.4 million during the prior-year period. Other expenses increased $0.9 million due to deployment of digital and technological capabilities, including our new front-end branch origination platform, and bank partnership fees of $0.2 million. In addition, we often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.

Operating Expense Ratio. Our operating expense ratio decreased to 12.4% during the three months ended June 30, 2026, from 13.2% during the prior-year period. Our operating expense ratio has improved as we have grown our loan portfolio and controlled expense growth.

Interest Expense. Interest expense increased $2.6 million, or 12.6%, to $23.0 million during the three months ended June 30, 2026, from $20.4 million during the prior-year period primarily due to an increase in the average balance of our debt facilities. The average balance of our debt facilities increased to $1.6 billion during the three months ended June 30, 2026, from $1.5 billion during the prior-year period. Our cost of funds increased 0.2% to 4.4% during the three months ended June 30, 2026, from 4.2% during the prior-year period.

Income Taxes. Income taxes decreased $0.9 million, or 27.9%, to $2.4 million during the three months ended June 30, 2026, from $3.3 million during the prior-year period. The decrease was primarily due to a $2.9 million decrease in income before taxes compared to the prior-year period. Our effective tax rates were 22.8% and 24.8% for the three months ended June 30, 2026 and 2025, respectively.

Comparison of the Six Months Ended June 30, 2026, versus the Six Months Ended June 30, 2025

Net Income. Net income increased $2.4 million, or 14.0%, to $19.6 million during the six months ended June 30, 2026, from $17.1 million during the prior-year period. The change in net income is explained in greater detail below.

Revenue. Total revenue increased $24.9 million, or 8.0%, to $335.3 million during the six months ended June 30, 2026, from $310.4 million during the prior-year period. The components of revenue are explained in greater detail below.

Interest and Fee Income. Interest and fee income increased $23.3 million, or 8.4%, to $300.6 million during the six months ended June 30, 2026, from $277.2 million during the prior-year period, primarily due to an 11.5% increase in average net finance receivables. The increase was partially offset by a 0.8% decrease in interest and fee yield. The decrease in yield was primarily due to changes in portfolio mix, including a higher percentage of large and auto-secured loans and a shift toward larger balance small loans with longer maturities, which generally carry lower interest rates.

The following table sets forth the average net finance receivables balance and interest and fee yield for our loan products for the periods indicated:

Dollars in thousands

Total originations decreased to $891.6 million during the six months ended June 30, 2026, from $902.4 million during the prior-year period. Small loan originations decreased $69.4 million, or 21.4%, driven by tightened underwriting in higher-risk business amid a more competitive environment for new customer acquisition. This decrease was partially offset by a $58.5 million, or 10.1%, increase in large loan originations, driven by growth in our auto-secured loan portfolio, new branches opened during 2025 and 2026, and the transition of small loan customers to large loans. The following table represents the principal balance of loans originated, refinanced, and purchased for the periods indicated:

Dollars in thousands

The following table summarizes the components of the increase in interest and fee income when comparing the six months ended June 30, 2026 and 2025:

Dollars in thousands

40

Insurance Income, Net. Insurance income, net remained consistent at $22.8 million during the six months ended June 30, 2026, and the prior-year period. During both the six months ended June 30, 2026 and 2025, personal property insurance premiums represented the largest component of aggregate earned insurance premiums. During both the six months ended June 30, 2026 and 2025, life insurance claims expense represented the largest component of direct insurance expenses.

The following table summarizes the components of insurance income, net for the periods indicated:

Dollars in thousands

Earned premiums increased by $0.7 million, and claims, reserves, and certain direct expenses increased by $0.7 million, in each case compared to the prior-year period. The increase in insurance premiums was primarily due to increases in personal property insurance premiums and life insurance premiums. Claims, reserves, and direct expenses increased primarily due to a prior-year release in personal property insurance reserves related to previous hurricane activity.

Other Income. Other income increased $1.6 million, or 15.2%, to $11.9 million during the six months ended June 30, 2026, from $10.4 million during the prior-year period, primarily due to marketing and processing fee income earned through our bank partnership program of $1.8 million and an increase in sales of our club membership products of $0.4 million, partially offset by a decrease in interest income of $0.6 million from decreases in our restricted cash balances compared to the prior-year period.

Provision for Credit Losses. Our provision for credit losses increased $15.3 million, or 12.9%, to $133.9 million during the six months ended June 30, 2026, from $118.6 million during the prior-year period. The increase was due to an increase in net credit losses of $15.5 million, partially offset by the change in the allowance for credit losses of $0.2 million, in each case compared to the prior-year period. The increase in the provision for credit losses is explained in greater detail below.

Allowance for Credit Losses. We evaluate delinquency and losses in each of our loan products in establishing the allowance for credit losses. During the six months ended June 30, 2026 and 2025, the allowance for credit losses included builds of $3.1 million and $3.3 million, respectively. The allowance for credit losses as a percentage of net finance receivables increased to 10.4% as of June 30, 2026, from 10.3% as of June 30, 2025, primarily due to changes in estimated future macroeconomic impacts on credit losses.

Net Credit Losses. Net credit losses increased $15.5 million, or 13.4%, to $130.8 million during the six months ended June 30, 2026, from $115.3 million during the prior-year period. The net credit loss rate was 12.3% during the six months ended June 30, 2026, compared to 12.1% during the prior-year period. The increase in the net credit loss rate included a 10 basis point impact from slower portfolio growth over the first six months of 2026 compared to the same period in 2025.

Delinquency Performance. Our delinquency rate increased to 7.0% as of June 30, 2026, from 6.6% as of the prior-year period, primarily driven by slower portfolio growth during the first six months of 2026 compared to the same period in 2025, which contributed approximately 20 basis points to the increase, and the continued impact of legacy balances from higher-risk segments that we have since tightened.

General and Administrative Expenses. Our general and administrative expenses increased $1.1 million, or 0.9%, to $130.1 million during the six months ended June 30, 2026, from $129.0 million during the prior-year period. The absolute dollar increase in general and administrative expenses is explained in greater detail below.

Personnel. The largest component of general and administrative expenses was personnel expense, which decreased $1.0 million, or 1.2%, to $78.8 million during the six months ended June 30, 2026, from $79.7 million during the prior-year period. The decrease was driven by lower incentives compensation of $1.4 million, decreased executive transition costs of $0.8 million, and higher capitalized loan origination costs, which reduce personnel expenses, of $0.4 million. The decrease was partially offset by higher labor costs of $1.4 million to support growth (including labor costs associated with the bank partnership program of $0.5 million that are expensed as incurred rather than deferred, as described above in “Factors Affecting Our Results of Operations”).

Occupancy. Occupancy expenses increased $0.9 million, or 6.6%, to $14.7 million during the six months ended June 30, 2026, from $13.8 million during the prior-year period, primarily due to expenses associated with opening 12 new branches since the prior-year period.

Marketing. Marketing expenses decreased $1.4 million, or 13.3%, to $9.1 million during the six months ended June 30, 2026, from $10.5 million during the prior-year period, primarily due to optimization of our framework for direct mail marketing of $1.7 million, partially offset by digital marketing costs associated with the bank partnership program of $0.2 million that are expensed as incurred rather than deferred, as described above in “Factors Affecting Our Results of Operations.”

Other Expenses. Other expenses increased $2.6 million, or 10.2%, to $27.5 million during the six months ended June 30, 2026, from $25.0 million during the prior-year period. Other expenses increased $1.8 million due to deployment of digital and technological capabilities, including our new front-end branch origination platform, and bank partnership fees of $0.4 million. In addition, we often experience increases in other expenses including legal expenses, bank fees, and certain professional expenses as we grow our loan portfolio and expand our market footprint.

Operating Expense Ratio. Our operating expense ratio decreased by 1.3% to 12.3% during the six months ended June 30, 2026, from 13.6% during the prior-year period.

Interest Expense. Interest expense increased $5.7 million, or 14.2%, to $45.9 million during the six months ended June 30, 2026, from $40.2 million during the prior-year period primarily due to an increase in the average balance of our debt facilities. The average balance of our debt facilities increased to $1.6 billion during the six months ended June 30, 2026, from $1.5 billion during the prior-year period. Our cost of funds increased 0.1% to 4.3% during the six months ended June 30, 2026, from 4.2% during the prior-year period.

Income Taxes. Income taxes increased $0.3 million, or 6.3%, to $5.8 million during the six months ended June 30, 2026, from $5.5 million during the prior-year period. The increase was primarily due to a $2.8 million increase in income before income taxes compared to the prior-year period. Our effective tax rates were 23.0% and 24.3% for the six months ended June 30, 2026 and 2025, respectively.

Liquidity and Capital Resources

Our primary cash needs relate to the funding of our lending activities and, to a lesser extent, expenditures relating to improving our technology infrastructure and expanding and maintaining our branch locations. We have historically financed, and plan to continue to finance, our short-term and long-term operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our debt facilities, including our senior revolving credit facility, revolving warehouse credit facilities, and asset-backed securitization transactions, all of which are described below. We continue to seek ways to diversify our funding sources. As of June 30, 2026, our funded debt-to-equity ratio was 4.4 to 1.0 and stockholders’ equity ratio was 17.8%, compared to 4.4 to 1.0 and 17.7%, respectively, as of December 31, 2025.

Cash increased to $6.8 million as of June 30, 2026, from $3.8 million as of December 31, 2025. We had immediate availability to draw down cash from our revolving credit facilities of $121.1 million and $145.3 million as of June 30, 2026 and December 31, 2025, respectively. Our unused capacity on our revolving credit facilities (subject to the borrowing base) was $441.6 million and $511.4 million as of June 30, 2026 and December 31, 2025, respectively. Our debt balance was $1.7 billion as of both June 30, 2026 and December 31, 2025.

Based upon anticipated cash flows, we believe that cash flows from operations and our various financing alternatives will provide sufficient financing for debt maturities and operations over the next twelve months, as well as into the future.

From time to time, we have extended the maturity date of and increased the borrowing limits under our senior revolving credit facility. While we have successfully obtained such extensions and increases in the past, there can be no assurance that we will be able to do so if and when needed in the future. As of June 30, 2026, the revolving period maturities of our securitizations and warehouse credit facilities (each as described below within “Financing Arrangements and Restricted Cash Reserve Accounts”) ranged from July 2026 to April 2028, with the exception of the RMIT 2022-1 securitization, for which the revolving period ended in February 2025. We had not exercised our right to redeem the notes of this securitization as of June 30, 2026. There can be no assurance that we will be able to secure an extension of the warehouse credit facilities or close additional securitization transactions if and when needed in the future.

Dividends and Stock Repurchases.

The Board may in its discretion declare and pay cash dividends on our common stock. The following table sets forth the quarterly dividends declared and paid for the six months ended June 30, 2026:

While we intend to pay our quarterly dividend for the foreseeable future, all subsequent dividends will be reviewed and declared at the discretion of the Board and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that the Board deems relevant. Our dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future.

See Note 14, “Subsequent Events” of the Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements,” for information regarding our cash dividend following the end of the fiscal quarter.

In December 2024, we announced that the Board had authorized a $30.0 million stock repurchase program. The authorization was effective immediately and extended through December 31, 2026. In November 2025, we announced that our Board had approved a $30.0 million increase in the amount authorized under the stock repurchase program announced in December 2024, from $30.0 million to $60.0 million. The authorization was effective immediately and extends through June 30, 2027. As of June 30, 2026, we had repurchased 1.2 million shares of common stock at a total cost of $40.3 million, including commissions and excise taxes, over the life of the program.

Cash Flow.

Operating Activities. Net cash provided by operating activities during the six months ended June 30, 2026 was $161.8 million, compared to $142.3 million during the prior-year period, a net increase of $19.4 million. The increase in net cash provided was primarily due to the year-over-year growth of our loan portfolio.

Investing Activities. Investing activities consist of originations and repayments of finance receivables, purchases of intangible assets, and purchases of property and equipment. Net cash used in investing activities during the six months ended June 30, 2026 was $145.1 million, compared to $165.4 million during the prior-year period, a net decrease in cash used of $20.3 million. The decrease in net cash used was primarily due to higher repayments of finance receivables, which partially offset cash outflows from new originations and purchases of restricted AFS investments.

Financing Activities. Financing activities consist of borrowings and payments on our outstanding indebtedness. Net cash provided by financing activities during the six months ended June 30, 2026 was $3.9 million, compared to $9.4 million during the prior-year period, a net decrease of $5.4 million. The decrease in net cash provided was primarily due to a decrease in the net advances on debt instruments of $5.8 million and an increase in the repurchases of common stock of $1.2 million, partially offset by a decrease in payments for debt issuance costs of $2.1 million.

Financing Arrangements and Restricted Cash Reserve Accounts.

As of June 30, 2026, we had five credit facilities outstanding and, from time to time, we engage in the private offering and sale of asset-backed notes. As part of our overall funding strategy, we have transferred certain finance receivables to affiliated VIEs for asset-backed financing transactions. Our debt arrangements described below, other than our senior revolving credit facility, are issued by each of our RMR and RMIT SPEs, which are considered VIEs under GAAP. These debts are supported by the expected cash flows from the underlying collateralized finance receivables. Collections on these finance receivables are remitted to restricted cash collection accounts, which totaled $95.5 million and $81.8 million as of June 30, 2026 and December 31, 2025, respectively. Our debt arrangements also contain various debt covenants. We were in compliance with all such debt covenants as of June 30, 2026.

Revolving Credit Facilities. The following is a summary of our revolving credit facilities as of June 30, 2026:

Dollars in thousands

Securitizations. The following is a summary of our securitizations as of June 30, 2026:

Dollars in thousands

RMC Reinsurance. Our wholly owned subsidiary, RMC Reinsurance, Ltd., is required to maintain reserves against life insurance policies ceded to it, as determined by the ceding company. These reserves are comprised of restricted cash and restricted AFS investments. As of June 30, 2026, the reserves totaled $25.4 million.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP and conform to general practices within the consumer finance industry. The preparation of these financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities for the periods indicated in the financial statements. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Allowance for Credit Losses.

The allowance for credit losses is based on historical credit experience, current conditions, and reasonable and supportable economic forecasts. The historical loss experience is adjusted for quantitative and qualitative factors that are not fully reflected in the historical data. In determining our estimate of expected credit losses, we evaluate information related to credit metrics, changes in our lending strategies and underwriting practices, and the current and forecasted direction of the economic and business environment. These metrics include, but are not limited to, loan portfolio mix and growth, unemployment, credit loss trends, delinquency trends, changes in underwriting, and operational risks.

We selected a PD / LGD model to estimate our base allowance for credit losses, in which the estimated loss is equal to the product of PD and LGD. Historical net finance receivables are tracked over the term of the pools to identify the incidences of loss (PDs) and the average severity of losses (LGDs).

To enhance the precision of the allowance for credit loss estimate, we evaluate our finance receivable portfolio on a pool basis and segment each pool of finance receivables with similar credit risk characteristics. As part of our evaluation, we consider loan portfolio characteristics such as product type, loan size, loan term, internal or external credit scores, delinquency status, geographical location, and vintage. Based on analysis of historical loss experience, we selected the following segmentation: product type, FICO score, and delinquency status.

As finance receivables are originated, provisions for credit losses are recorded in amounts sufficient to maintain an allowance for credit losses at an adequate level to provide for estimated losses over the contractual life of the finance receivables (considering the effect of prepayments). Subsequent changes to the contractual terms that are a result of re-underwriting are not included in the finance receivable’s contractual life (considering the effect of prepayments). We use our segmentation loss experience to forecast expected credit losses. Historical information about losses generally provides a basis for the estimate of expected credit losses. We also consider the need to adjust historical information to reflect the extent to which current conditions differ from the conditions that existed for the period over which historical information was evaluated. These adjustments to historical loss information may be qualitative or quantitative in nature.

Macroeconomic forecasts are required for our allowance for credit loss model and require significant judgment and estimation uncertainty. We consider key economic factors, most notably unemployment rates, to incorporate into our estimate of the allowance for credit losses. We engaged a major rating service provider to assist with compiling a reasonable and supportable forecast which we use to support the adjustments of our historical loss experience.

Due to the judgment and uncertainty in estimating the expected credit losses, we may experience changes to the macroeconomic assumptions within our forecast, as well as changes to our credit loss performance outlook, both of which could lead to further changes in our allowance for credit losses, allowance as a percentage of net finance receivables, and provision for credit losses. Potential macroeconomic changes have created conditions that increase the level of uncertainty associated with our estimate of the amount and timing of future credit losses from our loan portfolio.

Macroeconomic Sensitivity. To demonstrate the sensitivity of forecasting macroeconomic conditions, we stressed our macroeconomic model with 10% increased weighting towards slower near-term growth that would have increased our reserves as of June 30, 2026 by $1.6 million.

The macroeconomic scenarios are highly influenced by timing, severity, and duration of changes in the underlying economic factors. This makes it difficult to estimate how potential changes in economic factors affect the estimated credit losses. Therefore, this hypothetical analysis is not intended to represent our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment, nor does it consider management’s judgment of other quantitative and qualitative information which could increase or decrease the estimate.

Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rates will affect our results of operations and financial condition. We originate finance receivables either at prevailing market rates or at statutory limits. Our finance receivables are structured on a fixed-rate, fixed-term basis. Accordingly, subject to statutory limits, our ability to react to changes in prevailing market rates is dependent upon the speed at which our customers pay off or renew loans in our existing loan portfolio, which allows us to originate new loans at prevailing market rates. Because our large loans have longer maturities than our small loans and typically renew at a slower rate than our small loans, our reaction time to changes may be affected as our large loans change as a percentage of our portfolio.

We also are exposed to changes in interest rates as a result of certain borrowing activities. As of June 30, 2026, the interest rates on 80% of our debt (the securitizations) were fixed. We maintain liquidity and fund our business operations in part through variable-rate borrowings under a senior revolving credit facility and multiple revolving warehouse credit facilities. As of June 30, 2026, the balances and key terms of the credit facilities’ interest rate risk were as follows:

Based on the underlying rates and the outstanding balances as of June 30, 2026, an increase of 100 basis points in the rates of our revolving credit facilities would result in approximately $3.4 million of increased interest expense on an annual basis, in the aggregate, under these borrowings.

The nature and amount of our debt may vary as a result of future business requirements, market conditions, and other factors.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures as of June 30, 2026, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost–benefit relationship of possible controls and procedures.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, other than the risk factor set forth in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. In addition to the other information set forth in this report and in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (which was filed with the SEC on February 20, 2026), which could materially affect our business, financial condition, and/or future operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially and adversely affect the Company’s business, financial condition, and/or operating results.